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SEC Again Shows Willingness to Award Cooperation Credit to an Individual

Bruce Carton | March 29, 2012

On March 19, 2012, the SEC announced that it had credited a former AXA Rosenberg senior executive with "substantial cooperation" under the agency's Cooperation Initiative. The case, in which the SEC declined to bring an enforcement action against the executive, marked the SEC's first public announcement of cooperation credit awarded to an individual.

Just over a week later, on March 27, 2012, the SEC announced another case in which it awarded cooperation credit to an individual. This time, the SEC did file a case against the individual -- John Cinderey, a former executive vice president at United Commercial Bank -- for allegedly misleading the company's outside auditors who were evaluating financial statements of the bank and its public holding company. 

Under the terms of his settlement with the SEC, Cinderey agreed:

1. to settle the SEC charges without admitting or denying the allegations;

2. to an injunction from violating provisions of the federal securities laws regarding record-keeping, misleading outside auditors, and internal controls; and

3. that he would not have to pay a civil penalty (the SEC noted that Cinderey had already paid a $40,000 civil penalty in an FDIC administrative action).

The SEC stated that the terms of this settlement reflected "credit given to Cinderey by the Commission for his substantial assistance in the investigation and the fact that he has entered into an cooperation agreement to assist in an ongoing related enforcement action."